Services are increasingly offered using software accessed over a computer network. The software, sometimes called on-demand software, is provided by a business known as an application service provider (ASP). ASPs have developed due to increasing costs associated with offering specialized software, as well as difficulties in distributing and upgrading the software on separate hosts. ASPs provide services for entities such as businesses, government organizations, non-profit organizations, membership organizations, and individual users.
ASPs are typically divided into several categories. Specialist or functional ASPs provide a single service or function, such as a credit card payment processing or timesheet service. Vertical market ASPs create packaged solutions for a specific customer type, such as a medical or dental practice. Enterprise ASPs deliver broad spectrum solutions, such as resource management, e-commerce, and customer relationship management, to large organizations and corporations. Local ASPs provide services to small businesses within a limited area.
ASPs typically share a set of common features. First, the software applications that provide the services are owned and operated by the ASPs. In addition, the servers that provide the software are also owned, operated, and maintained by the ASPs. The services are generally accessed through a browser or thin client over a network, such as the Internet. The network-based nature of ASPs allow greater reliability, scalability, availability, and security of the products and services provided by the ASPs.
Clients of the ASP are typically charged on a per-use basis, or pay for use of a service over a period of time, such as a week, month, or year. Additionally, clients may be charged extra for access to certain features of the service, or may pay for tiered features of the service. For example, a customer may pay $20 for basic access to the service, $30 for a “plus” package that enables additional features, or $40 for “premium” access to all features provided by the ASP. Alternatively, the customer may pay a fee for basic access to the service and select certain features to add onto the service. The customer may then be billed for each additional feature he/she selects.